Shares of General Motors (NYSE: GM) surged on Tuesday after the automaker beat fourth-quarter earnings expectations and issued positive guidance. The strong performance, achieved despite tariff pressures, restructuring costs in China, and reduced EV capacity, underscores the company’s resilience and positions it for accelerated growth in 2026.
Stock Rallies
The post-earnings rally continued in the afternoon, and the stock set a new record. It has grown more than 60% in the past six months alone. The upbeat investor sentiment also reflects a new $6-billion share buyback program and a 20% hike in quarterly dividend. GM has been one of the best-performing Wall Street stocks since last year, significantly outperforming the broader market during that period.
The Detroit, Michigan-headquartered company’s fourth-quarter earnings, excluding one-off items, increased year-over-year and exceeded estimates, despite a modest decline in sales. At $2.51 per share, adjusted earnings were up 30% from the year-ago period. Pre-tax profit rose 13% to $2.84 billion, driven by strong demand for the company’s SUV, pickup, and crossover models that carry higher profit margins.
On a reported basis, the company posted a net loss of $3.3 billion or $3.60 per share for the December quarter, compared to a loss of $2.96 billion or $1.64 per share last year. Meanwhile, revenue declined 5.1% to $45.3 billion in the fourth quarter from $47.7 billion in the year-ago period. Analysts were expecting a slower decline.
Guidance
Encouraged by the positive bottom-line performance, the GM leadership projects earnings per share in the range of $11.0 to $13.0 for fiscal 2026. The mid-point of the forecast range is above consensus estimates and represents an increase from last year. The guidance for full-year net income is between $10.3 billion and $11.7 billion, while EBIT-adjusted profit is expected to be in the range of $13.0 billion to $15.0 billion. The outlook includes anticipated capital spending of $10-12 billion, which includes GM’s battery cell manufacturing joint ventures.
Commenting on GM’s near-term outlook, CEO Mary Barra said, “Our compelling vehicle and technology portfolio, a resilient US market, and the steps we have taken to strengthen our position should help make 2026 an even better year for GM. The charges we took in the second half of the year to reduce EV capacity will reduce our fixed costs and resolve the majority of our commercial claims tied to lower volume. In addition, our warranty expense is moving in the right direction and our EV losses will be lower. As a result, we expect full-year EBIT adjusted margins in North America will be back in the 8% to 10% margin range.”
Cash Flow
GM’s healthy cash flow has enabled it to approve a $0.03 per share increase in the quarterly dividend rate to $0.18 per share. Meanwhile, the company recorded a multi-billion-dollar loss from scaling back its EV production in response to slowing demand, high manufacturing costs, and reduced federal tax credits. GM plans to invest $10–$12 billion annually in 2026 and 2027, including about $5 billion to expand US manufacturing capacity for high-demand vehicles, aiming to reduce tariff exposure.
GM shares were trading up 9% on Tuesday afternoon, after opening the session at $83.63. That is well above the average price of $57.81 over the past 52 weeks.